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Latest Developments, December 21

Corporate liabilityLawfare reports the Obama administration has filed a brief with the US Supreme Court supporting Nigerian plaintiffs in the Kiobel lawsuit against oil-giant Shell, arguing corporations can be held liable under federal law for abuses committed abroad.“The brief –signed by State Department Legal Adviser Harold Koh and (somewhat surprisingly) by Commerce General Counsel Cameron Kerry in addition to Solicitor General Don Verrilli – argues that the question of corporate liability under the Alien Tort Statute is governed by federal common law, not by international law, although international law “informs” the issue. And the brief goes on to argue that under federal common law, corporations may be held liable for violations of both domestic and international law: “[C]orporations have been subject to suit for centuries, and the concept of corporate liability is a well-settled part of our ‘legal culture.’” The brief states that the United States is not aware of any international law “norm” that would prohibit corporations from being sued for violations of international law.”

NationalizationAgence France-Presse reports a provincial branch of South Africa’s ruling African National Congress party has voted in favour of a resolution calling for land expropriation and mine nationalization. “ ‘All productive land must be nationalised. Compensation must not be paid on the land itself but on improvements. The price must be determined by the state through the state evaluator,’ the party’s Limpopo provincial chairman Soviet Lekganyane was shown as saying by the eNews channel.…‘We reiterate our call for nationalisation of mines and other key strategic sectors like Sasol and ArcelorMittal,’ Lekganyane was quoted as saying by the Sapa news agency, referring to major oil and steel activities.”

Air battleThe Associated Press reports that an EU court has upheld a law charging airlines flying to Europe for their carbon emissions but a US trade group, Airlines for America, is vowing to continue fighting the “unilateral” and “counterproductive” measures. “The European Court of Justice in Luxembourg dismissed arguments that imposing the European Union’s cap-and-trade carbon credits program on flights to and from European airports infringes on national sovereignty or violates international aviation treaties. U.S. and other non-European airlines had sued the EU, arguing that they were exempt from the law.”

Selling developmentThe Institute of Development Studies’ Spencer Henson raises some concerns over NGO efforts to “sell development” by promoting the idea that buying certain products will benefit poor people half a world away.“First, it is very much based on the notion of benevolence of the (powerful) rich towards the (powerless) poor. UK consumers can decide how to spend their money at Christmas whereas the poor have little money to spend on anything. Further, as a wealthy donor the consumer can decide who is ‘deserving’ of their charity, however they might judge this.Second, and more importantly, efforts to sell development do little or nothing to challenge the very reasons that people are poor…and the need for benevolence by the rich in the first place. Thus, how is it that such global inequality exists, and what can be done about it? The act of buying a goat, a charity Christmas card or a handicraft fails to challenge the status quo. Some would even argue that buying development perpetuates the very systems that make people poor in the first place.”

IFI reformPIMCO’s Mohamed El-Erian argues the economic convergence that is changing the previously Western-dominated global order is unpredictable and requires “deep reform of the multilateral system” and its institutions.“Multilateral institutions, particularly the IMF, have responded by pumping an unfathomable amount of financing into Europe. But, instead of reversing the disorderly deleveraging and encouraging new private investments, this official financing has merely shifted liabilities from the private sector to the public sector. Moreover, many emerging-market countries have noted that the policy conditionality attached to the tens of billions of dollars that have been shipped to Europe pales in comparison with what was imposed on them in the 1990’s and early 2000’s.”

Food speculationThe Guardian speaks to a food expert whose research predicted the Arab Spring and forecasts high food prices will trigger global riots and revolutions in the next two years unless something is done to rein in speculation. “[The New England Complex Systems Institute’s Yaneer Bar-Yam] believes the time has come for global regulators to step in and manage the global market. Their first task would be to guarantee transparency and make public information previously shrouded in secrecy – such as who holds the biggest stakes in global commodities. Transparent accounting practices would have made the disappearance of $1.2 bn worth of customer money from the books of MF Global less a matter of sleight of hand and more a matter of international crime.The second part of the speculation solution hinges on a return to traditional position limits in commodities, limits enforced by international laws geared to stop bankers, hedge funds and sovereign wealth funds from going long on the world’s food supply and, in effect, gambling on hunger.”

Charter citiesOxfam’s Duncan Green expresses concern over the life-size radical experiment with charter cities Honduras is about to undertake. “On the basis of the Economist piece, at least, the Trujillo charter city looks like a mess. The government is going to bypass constitution, laws etc, outsource the lot to private interests and rely for good governance on a commission of overstretched VIPs. If the hyperactive [Center for Global Development president Nancy] Birdsall is typical, they will have so many other commitments that they really are not going to be able to invest the time to micromanage a potentially chaotic period of institution-building. I emailed Nancy about this and she replied that yes, there are big risks, but the world needs more experiments like this not least because ‘we don’t know in the development community how to ‘produce’ good governance’. She points out that there are resources, e.g. to pay at least one aide per member of the transparency board. But that still seems like a pretty skeletal arrangement and many of the criticisms I quoted in my original post apply in this case too. Got a bad feeling about this one.”